There are very few virgin deposits that have not had some form of prior exploration. I don't have issues with taking on exploration ground to take it to the next level. That is generally how the game works. Simplistically, a small tier, proves it up and sells to a mid-tier, who takes it to JORC compliant and sells to, or JVs with, a top tier.
TBRs Davao mine unquestionably is a super-rich deposit sitting on top of a highly mineralised fault line. Their first step is to get a JORC compliant substantive resource (as they have just done in Africa). But, their greatest trick is to navigate the Philippines political scene to be able to get the gold out of the country without having to line too many pockets.
Billis is a very streetwise operative - he is proving he can work with the Africans, and he backs TBR in to do the same with the Filipinos! But with the worsening coronavirus situation in the Philippines, we can expect delays to this project. With the POG still on the up, this may not be a bad thing.
TBR shareholders have been very well rewarded, so there is no reason to not continue to back their management team.
This is very different to stepping into an operational mine where the former tier 1 contractor(s) want to offload. For instance, take Newmont and Barrick selling their interests in the Superpit last year. Why would a tier 1 contractor sell out of a mine with a great future (as they are gold miners who are only looking to increase gold production)? The reasonable conclusion is that they sold for a price that rewarded them better than continuing with gold production. The Superpit is especially intriguing when both Newmont and Barrick off-loaded their interests at the same time. The NST/SAR spin doctors now talk this deal up. Time will tell if it is a good buy, one thing for sure is that the Superpit will have a massive environmental repatriation cost.
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